California: We'll lead on health law

SACRAMENTO, Calif. —While Republicans open debate Tuesday on repealing health reform, leaders in California are sitting down to a completely different discussion: how they can most aggressively implement the new law and remain among the Obama administration’s model states on the reform — without stumbling over the significant challenges that stand in their way.

California’s Health and Human Services secretary, Diana Dooley, had dinner last week with Joel Ario, the Obama administration’s lead on health exchanges, and discussed the state’s progress on implementing the new law.

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Ario complimented Dooley, telling her that the Obama administration saw California as a “pace car” on health reform. Dooley offered a slightly different perspective.

“I told him we don’t want to be a pace car state,” Dooley told POLITICO in an interview after just one week in office. “We want to be the lead car.”

Dooley’s confidence is a good indication of California’s attitude toward health reform these days. First out of the gate on setting up a health benefits exchange, the Golden State is eager to blaze a trail after its numerous state attempts at health reform have failed.

“The fact that Congress is still fighting about health reform, it’s in our nature to say, ‘We’re always out front; we always reject the status quo,’” said Daniel Zingale, senior vice president of California Endowment, a Sacramento-based nonprofit focused on health policy. “That makes us even more determined to make it work here.”

California’s aggressive push forward has resonated throughout the country. In interviews with POLITICO, health policy experts regularly cite it as a state to watch.

But there’s another narrative unfolding in parallel about the exceptional challenges faced by the state the Obama administration holds up as a example of health reform done right. Much of it is wrapped up in scale: California has the highest number of uninsured citizens of any state; at just under 7 million, it dwarfs the entire population of Massachusetts by a half million people. Of the 32 million Americans the Congressional Budget Office estimates will gain health insurance in the coming decade, California is expected to enroll just under 15 percent of them, according to an analysis by nonprofit Families USA.

Getting millions of Californians insured will require overcoming significant hurdles — namely, a patchwork of Medicaid enrollment systems and a state government in fiscal crisis that is scaling back resources just at the time health reform needs to grow.

“In California, we do feel a bit more urgency, just given the size of our state,” said Kim Belshe, who recently retired as California’s Health and Human Services secretary and now serves on the board of the state’s Health Benefit Exchange. “The number of people who are uninsured, the diversity of our population who will remain outside the reach [of health reform] — some of these system issues [affect] how we move towards the federal requirements.”

To be sure, California has resources at its disposal most states can only dream of. A robust nonprofit community stands ready to bolster implementation with millions of dollars in outreach and education on the new law. The California Endowment recently spent $5 million on outreach to the Latino community concerning health reform’s consumer protection provisions that came online in September. It plans to spend $100 million in the coming year promoting the health and well-being of underserved Californians, largely focusing on getting word out on the new law. Voters have proved incredibly supportive of the law, sending a strong slate of pro-health-reform, statewide officeholders to Sacramento in the 2010 elections.

California moved forward on implementation with unparalleled speed, a result, many say, of the state’s accumulated knowledge after numerous local reform efforts failed. Many lived through Gov. Arnold Schwarzenegger’s 2007 reform push, a proposal similar to the federal law in that it contained individual mandate, guaranteed issue and subsidy provisions, which died in a state Senate committee after a year of heated debate. For more than a decade, the state ran a California Health Exchange, which closed five years ago, brought down by a lack of healthy enrollees.